HLIB Research said the industrial land sale for RM740.7mil, with a gross profit margin of 60%, could translate into an estimated net profit of RM337.8mil.
PETALING JAYA: IOI Properties Group Bhd
(IOIPG) is expected to gain a significant earnings uplift and balance sheet relief from its latest land transaction, underpinned by what analysts describe as an exceptionally attractive margin and strategic value crystallisation from its industrial land bank.
According to Hong Leong Investment Bank (HLIB) Research, the industrial land sale for RM740.7mil, with a gross profit margin of 60%, could translate into an estimated net profit of RM337.8mil.
“Given the highly attractive margin, this transaction is expected to lift our earnings forecast for the financial year ending June 30, 2027 (FY27) significantly by 32.6%,” the research house said.
“On a pro forma basis, the proceeds would reduce net gearing from 94.2% to 91.2%, marking tangible progress in deleveraging,” it added. HLIB Research said it viewed the transaction as a meaningful and tangible step in IOIPG’s’ ongoing balance sheet deleveraging efforts.
It also pointed to further balance sheet improvement prospects, saying the group’s upcoming real estate investment trust listing, expected in the third quarter of this year, should further reduce its net gearing.
HLIB Research maintained its “buy” call on IOIPG, with an unchanged target price of RM4.15. For context, IOIPG recently announced that it had inked an agreement to sell three plots of land measuring 136.03 acres at its IOI Industrial Park @ Banting for RM740.7mil to Bridge Data Centres, implying a selling price of about RM125 per sq ft.
Completion is targeted within nine to 12 months, likely in the second quarter of financial year 2027 (2Q27) or 3Q27, TA Research said it viewed the transaction positively.
“It represents a monetisation of industrial land at a premium valuation and reinforces the credibility of IOIPG’s Industrial Park Series launched in 2024,” it said.
“The implied land price of about RM125 per sq ft is above industrial land asking prices in the vicinity of RM50 to RM95 per sq ft, as well as IOI Industrial Park @ Banting’s indicative RM95 per sq ft pricing,” it noted.
It also believes the price was justified by infrastructure readiness, connectivity to Kuala Lumpur International Airport and Port Klang, and suitability for data centre developments. TA Research estimated a net profit of RM338mil from the land transaction after applying a 24% corporate tax rate.
“This would lift our FY27 earnings forecast of RM799.3mil by about 42%, representing a sizeable one-off uplift to group earnings,” the research house said.
TA Research maintained its “buy” rating on IOIPG and raised its target price to RM3.94 from RM2.78 previously. For 1Q ended Sept 30, 2025 (1Q25), IOIPG’s revenue rose 40.8% to RM968.7mil from RM687.85mil a year earlier.
This was driven by strong growth across all three core segments – property development, property investment, and hospitality and leisure – which increased 47%, 31% and 44%, respectively.
Net profit for the quarter surged to RM664.33mil from RM69.17mil in 1Q25, due to a one-off remeasurement of RM502.8mil following IOIPG’s acquisition of the remaining 50.1% stake in Scottsdale Properties Pte Ltd.
